Social media influencers and crypto memes fall into the scope of the U.K.'s rules for financial promotions, the country's financial watchdog said in finalized guidance published Tuesday.
The Financial Conduct Authority (FCA) said last July that unpaid influencers may be subject to its promotions regulation after bringing the crypto sector into its scope last October.
"Any type of communication is capable of being a financial promotion and subject to the financial promotion restriction. We’ve seen memes and other similar communications circulated on social media, with users often not realizing they may be subject to our rules. The use of memes in promotions is particularly prevalent in the crypto-asset sector," the guidance said.
U.K. social media influencers have already been scrutinized for their involvement with crypto. In 2022, former reality show contestants Jessica and Eve Gale were told to stop misleading their followers with pro-crypto posts.
The guidance is based on the FCA's promotions regime, which says that a business should not communicate an "invitation or inducement to engage in investment activity" unless the promotion is communicated by an authorized person or a person with an exemption. This includes influencers who are operating in the "course of business, which could mean they are employed or have a commercial interest in posting the communication, the guidance said.
Now that crypto firms are in the FCA's regulatory scope, firms or promoters must register with the FCA or have their ads approved by someone who has the credentials to do so. They are also required to include clear risk warnings on websites and communications and give first-time buyers a 24-hour cooling-off period before finalizing purchases.
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Edited by Sandali Handagama.
